لخّصلي

Revenue to Cash Cycle
The revenue to cash cycle involves activities related to the sale of goods and services and the collection of customers’ cash payments. The cycle begins with a customer order and ends with the collection of the cash from the customer.
To include the collection of customers’ cash payments for sales, the company needs to maintain accurate
records of customers’ outstanding invoices. Thus, the accounts receivable subsidiary ledger is an important
function of the AIS. Customer records also include payment history, assigned credit limit, and credit rating.
The accounting information system is used for:
• Tracking sales of goods and services to customers.
• Recording the fulfilling of customer orders.
• Maintaining customer records.
• Billing for goods and services.
• Recording payments collected for goods and services provided.
• Forecasting sales and cash receipts using the outputs of the AIS.
The process of entering an order and sale into the AIS also updates the inventory module so that items sold are deducted from on-hand inventory and their costs charged to cost of goods sold.
The AIS should include a means to invoice customers as products are shipped. The production of the invoice and the production of the packing slip should occur simultaneously, and nothing should be shipped without a packing slip.
The AIS needs to be able to produce analytical reports of sales orders, sales terms, and payment histories for customers for use in predictive analytics. Sales orders can be used to predict future sales, and the sale terms can be used to make cash flow forecasts.
Activities in and inputs to the revenue to cash cycle include:
• Receipt of customer orders and creation of sales orders. The sales order serves as input to the AIS and contains full customer information, payment method, item or items sold, prices, and terms.
• Inventory is checked to determine whether the item or items ordered are in stock. A process needs to be in place to track and follow up on backordered items.
• An order confirmation may be emailed to the customer, particularly for orders received on the Internet.
• If the order includes a request for credit, the customer’s credit is checked. A process needs to be in place to screen for fraudulent orders, as well, and much of that can be automated in the AIS.
• If the order is to be paid by credit card, preliminary credit card authorization is obtained for the amount due.
• Input is created to the AIS for the invoice and the packing slip. (If the order was received over the Internet, the input to the AIS may be automatically created.)
• Notice is sent to the warehouse to print the packing slip, pick the order, and prepare it for shipping.
For a service, the service is scheduled.
• Shipping information is processed, the package is moved to the shipping dock to be picked up by the carrier, or the service is provided. For a credit card sale, the credit card charge is released. For a sale made on credit, the invoice is sent to the customer.
• The accounts receivable module, inventory module, and general ledger are updated, and reports
are processed.
• A process needs to be in place to handle approval and processing of returns. If a return is approved, the process needs to include making sure the returned item is physically received and, if it can be resold, that it is physically delivered back to the warehouse and added to inventory on hand in the inventory module at the correct cost. A credit is created to the customer’s account and an appropriate journal entry is made to the general ledger.
• When payment is received for a credit sale, a remittance advice (usually detached from the invoice and sent back by the customer) should accompany the customer’s payment. The remittance advice is used to input the information about the payment received to the correct customer account in the accounts receivable module, including the amount received and the invoice or invoices the payment is to be applied to. The AIS also updates the cash receipts journal and the general ledger to record the increase to cash and the decrease to accounts receivable.
Inputs to the revenue cycle can be made by desktop computer, voice inputs, touch-tone telephones, pointof-sale systems, or tablet computers using wireless capability. Sales made on the Internet may automatically update the subledgers and the general ledger in the AIS. Outside salespeople may use laptops, mobile devices, portable bar code scanners, and other types of electronic input devices to enter sales orders. Retail salespeople may use on-site point-of-sale systems.
Outputs of the revenue to cash cycle include:
• Internal management reports such as sales reports and inventory reports.
• Customer statements summarizing outstanding sales invoices by customer, payments received,
and balance owed.
• Customer aging reports, showing the total accounts receivable outstanding balance broken down according to ranges of time outstanding, such as amounts outstanding for 0 to 30 days, 31 to 60 days, and so forth.
• Collection reports, showing specific accounts that need follow-up for overdue balances.
• Information from sales reports, receivables aging reports, and receipts reports is used as input to a forecast of cash receipts.
• Various outputs are used in preparing closing entries and producing external financial statements.
For example, the aging report and other information is used in estimating credit loss expense for the period.